Anyone Have Good or Bad Experiences with Short Sales?

Oh, lord. My husband is a broker and HATES short sales. Honestly, and I hate to say it, but it is often faster just to wait until the home goes into foreclosure, and buy it directly from the bank. It's just very, very difficult to buy a home in short sale UNLESS the price has already been approved by the bank (and even then, it can be a 3-4 month process, and even so may not go through). If you are dead-set on buying a home in short-sale, try to limit your search to homes that already have had their price approved by the bank (this means that someone else has already fallen out of escrow on the home, but before they did, the bank approved the sale price). Your realtor can help you with this; make sure you are using an experienced realtor and the process will go as well as it can.

We put a bid on a short sale property in October of last year. The bank didnt approve it until late March! By then, our lease had already expired and we had to renew so we had to pass on the home.

We made an offer on a bank-approved short sale in mid February, the bank approved the sale for 153,000. Bank signed off within 2 weeks. Suddenly there is a 2nd mortgage nobody knew about. Over 2 months and still nothing from bank #2. Then, apparently the previous owner owed 20,000 in hoa fees. Bank #1 comes back and insists on an extra 6,000 to help cover these hoa fees. We agree, as it is still a great price. Still no word from bank #2.... So here we are, 3 months later, paying almost 160,000 now and still have no approval from the second bank (who, by the way, was being contacted EVERY day by our short sale negotiator). After 3 months, we withdrew our offer out of frustration. 2 weeks later, the home has been foreclosed on and is on the market for 154,900! So, like Catherine said, it may be better to just look at foreclosures. Also, do make sure your realtor is experienced in short sales if you decide to go that route!

We bought a short sale in August 2009. We got a great deal on the house. The worse part was the waiting. We put an offer on the house in April, and in July we found out that our offer was accepted, and we closed on the house on August 31. The good thing about short sales is that a lot of people don't want to wait on them so they are usually less competitive, which makes it good for you. Before we bought our house, we put down an offer for a foreclosure in a very desirable neighborhood. When we found out that we didn't get it, we were also told that there were 21 other offers put down on the house.

Short sales do take a long time. There are such a high percentage of homes on the market now, however, that sometimes you do have to deal with the shorts sales. This is especially if you are looking in a limited price range. You have to find a real estate agent who specializes in short sales because a lot of agents just don't want to deal with them. I purchased my condo in a short sale going on 2 years ago. It did take me 6 months to finally close on a place, and I put offers on many. Another bad part about short sales, though not a really big deal (just annoying) is the amount of collections mail I receive for the old owners who didn't do changes of address...
From reading someone else's answer, I also just remembered that I had to pay an extra couple thousand dollars that I didn't find out about until closing because the old owners had a lien for not paying their HOA dues.

We sold our home in a short sale about 3 years ago. If I recall, it was only a month or so from the time that we got the offer until we closed. We had already gotten bank approval, and it was listed as short sale so the buyers knew they couldn't offer too much below. Yes, it was a bit more of a hassle than a regular sale. But they got a good deal and we got a buyer without foreclosure, and the bank didn't have to go through the ordeal of foreclosure (which may cost both them and the buyer more than in a short sale)

I did not buy a short sale, but bought a foreclosure with no problems. The bank did take some time to counter offer when it came to negotiating, but the entire deal was closed in a month's time and at a great price. I agree with the others, to look for a foreclosure rather than a short sale.

In AZ, I have seen pre-approved short sales close within 1-2 months, especially recently as the banks are becoming more proficient. But don't fall in love with the property until you have keys in hand because anything can change at any moment. Foreclosures are easier, faster and the bank will often ask for less for the same property.

My sister and her husband had to try to short sale their home a few years ago. They had an interested buyer and approval from the bank to do a short sale, but when it came time, the bank dragged its feet and dragged its feet until the buyers disappeared. Then, they repeated the foot dragging with a second buyer, until that buyer disappeared. Finally, my sister and her husband were informed that they would have to get re-approved to do a short sale should a new buyer surface, and by the time all was said and done, they were foreclosed on and no longer had to worry about it. When we considered purchasing a short sale, my sister let me know what their final realtor said, which was essentially that banks are unpredictable, even if they have given previous approval on a short sale because they often feel they will do better to repossess the home and sell it at auction (interestingly, exactly what happened to my sister's home). Our realtor confirmed that it is a very iffy proposition unless you have all the time in the world to wait for approval which very possibly won't ever come.